In 2007, bank lending across borders peaked. Since then, it has declined by 40%. This is a vote of “reduced confidence” by bankers on the international banking system.
Cross-border lending fell by 1.9% in 2012, reports the Bank for International Settlements, the central bankers’ central bank. The main reason was a decline of 5.2% into the Eurozone area.
There is lending across borders other than bank-to-bank lending. The banks’ share is now at 38%. This is a record low. It was 46% in 2007. Year by year, it falls.
The bankers don’t trust banks in the developed world. The BIS report made this assessment: “The decline in global cross-border interbank positions was more pronounced in 2012 than in previous years.”
In other words, it’s getting worse, not better. Five years after the peak, it’s getting worse.
There was a 16% decline in global lending to U.S. banks.
The bankers are losing confidence in the solvency of the banks in the developed world. They do not see the situation as getting better. It is getting worse.